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LPG Shock Hits India's Food Service Sector: Restaurants Cut Staff, Trim Menus as Costs Surge

New Delhi: India's food and beverage service industry, which is still recovering from losses from the COVID-19 lockdown era, is now facing another crisis: Rising commercial Liquefied Petroleum Gas (LPG) prices and supply disruptions that are affecting restaurant operations nationwide. Restaurants are also grappling with rising staff costs and are resorting to workforce reductions, downsizing menus or increasing prices to survive. The restaurant industry, which employs millions of people across India, operates on thin margins, and is highly sensitive to input cost fluctuations. Fuel is one of a restaurant's biggest operating expenses, and LPG prices are currently surging. Restaurant owners say this will significantly affect their ability to hire staff and ultimately push up food prices. Restaurants Forced To Reduce Staff And Menus According to restaurant owners, the continued volatility in LPG prices and supply has left them with no option but to take drastic measures to remain viable. Across the country, many establishments are either temporarily shutting down, reducing their workforce or limiting operations until LPG supply stabilises. Jai Prakash Rathore, who runs a decades-old food business in Delhi's Sadar Bazar, said the shortage has brought his operations to a near standstill. "We used to have 30-35 workers, but most have left. Work of the halwai has stopped completely. In all my 40-50 years in this business, I have never faced such difficulties," he said. With commercial cylinders unavailable, he has been forced to rely on domestic LPG cylinders, often purchased at inflated prices of Rs 3,000-Rs 4,000. On some days, he even used cylinders from his home kitchen to keep the business running, disrupting household cooking. Similar distress is visible across Delhi. Radheshyam, who runs Chennai Flavours in Karol Bagh, said his outlet has switched to domestic cylinders due to high costs and supply shortages. He said, "Not only are cylinders unavailable, but their prices have also gone up. We've had to increase food prices and cut down our menu." Items such as red chutney, rawa dosa, and uthappam have been discontinued, because they require longer cooking times and higher gas consumption. The outlet now offers a limited menu, and closes early. "Earlier, we had long queues. Now we are struggling to keep the kitchen running," he added. Industry players say these changes are no longer temporary adjustments but part of a broader survival strategy. Many restaurants are redesigning menus to focus on items that are quicker and cheaper to prepare, while eliminating energy-intensive dishes. Consumers Feel The Pinch As operating costs increase, customers are beginning to feel the impact. Many eateries and street vendors have raised prices, in some cases multiple times, over the past few weeks. Neha Verma, a Delhi-based professional, said several of her favourite restaurants on food delivery platforms are no longer operational. She said, "Whenever I check, they show temporary closures. I later found out they are struggling to arrange LPG cylinders." In Gurgaon, Sahil Rana observed a similar trend at the street level. A local tea vendor increased the price of a single cup by Rs 10. "He said he is getting cylinders at Rs 4,000. How else will he manage?" Rana said. The situation is particularly difficult in traditional markets. Rajendra Sharma, General Secretary of the Sadar Bazar Traders Association Federation, said nearly 60 per cent of hawkers dependent on daily earnings have left due to the inability to procure LPG for their homes.

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